Optimal Directions for Directional Distance Functions: An Exploration of Potential Reductions of Greenhouse Gases

Benjamin Hampf and Jens Krüger

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This study explores the reduction potential of greenhouse gases for major pollution emitting countries of the world using nonparametric productivity measurement methods and directional distance functions. In contrast to the existing literature we apply optimization methods to endogenously determine optimal directions for the efficiency analysis. These directions represent the compromise of output enhancement and emissions reduction. The results show that for reasonable directions the adoption of best-practices would lead to sizable emission reductions in a range of about 20 percent compared to current levels.

Date: 2013-03-12
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Published in Darmstadt Discussion Papers in Economics . 216 (2013-03-12)

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:60952

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